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The Budget could have made more impactful changes to the retirement incomes system to help those at risk of poverty in retirement, according to the Actuaries Institute.
Hume moves to tackle ‘inflexible’ super system
Hume moves to tackle ‘inflexible’ super system
Financial services minister Jane Hume has revealed further details around the government’s thinking in a budget that has been unusually generous towards super contributions, saying the current system is “inflexible” for older members and those working part-time.
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Addressing an FSC member webinar on Thursday, Jane Hume said last year’s Retirement Income Review had revealed that although the Australian super system was “up there with the best in the world”, there were still improvements to be made.
“For eight years the government has been chipping away with reforms to super to make our system more efficient,” she said.
9%
9.25%
9.5%
10%
10.5%
11%
11.5%
12%
This delay has had a knock-on-effect. According to 2017-18 data from the Australian Bureau of Statistics, the median super balance for people approaching retirement (aged 55-64) was $118,600 for women and $183,000 for men.
That falls short of the ASFA retirement standard, which sets out how much people should have in super for a comfortable retirement.
Raising the SG is intended to help close that gap, and make sure Australians are able to fund a comfortable retirement.
Short term income vs long term benefits
When it comes to superannuation, the conversation tends to hinge on one key question – what are we willing to sacrifice in the short term for future benefits?